Why was my credit card application rejected?

There are several situations in which your credit card application will be rejected. We explain why that might be, and what you should do next.

So you’ve applied for a credit card but your application was rejected or denied. It’s unfortunate, but thankfully it’s not the end of the world. After having a card application rejected, there are still several things you can do afterwards to get the credit card you really want.

If you’re wondering why your application was unsuccessful, here are some of the usual reasons why a lender might not view an application favourably – and what you can do to fix it.

Why was my credit card application rejected?

There are a few main reasons that might be behind a lender’s decision to reject or deny a credit card application. A bank will reject your credit card application if they think that, based on the information you gave, you won’t reasonably be able to pay off your credit balance each month, or if they simply can’t verify the information you provided in your application.

Credit cards come with a fair amount of financial risk through their annual fees and high interest rates. This means that applying for a credit card is a comprehensive process that checks your full identity and financial situation.

Here are some of the reasons your credit card application might be rejected:

Eligibility: Applicant did not meet required eligibility criteria for that particular credit card. If you were under 18 years old, not a citizen, or recently declared bankrupt at the time of applying, the lender will not be able to approve your application.

Employment: Applicant is employed at a level lower than required for eligibility (e.g. casual work only).

Overall financial situation: Applicant has a lot of expenses compared to their level of regular income, which is viewed as high risk. Lenders must be satisfied that you could repay the full credit limit of the card you are applying for if you spent that much on the card.

Credit rating: Credit reporting agency used by the lender has given the applicant a poor credit rating, and/or the credit report shows late payments, too many applications, or other problems. If you are struggling to repay debt – or have not repaid outstanding debts from the past – a lender will not provide you with a new credit card.

Borrowing history: If you already bank with this financial institution and you have a history of late payments or overdrawn accounts on credit or loans, the lender is highly unlikely to lend you new credit.

We’ve explained a few of these factors in more detail below, and how to make sure your application is approved next time.

If you don’t meet the usual eligibility criteria – for example, you may be self-employed – you may need to get in touch with the bank to provide extra supporting documentation for your application to be reconsidered.

If you believe that the lender may have rejected your application based on not having enough information, feel free to get in touch to provide them with that information and ask them to reconsider your application.

Card selection

Low Rate: For consumers seeking a credit card with a low interest rate and flexible repayment conditions. These cards are designed for consumers who use their card for everyday spending but don’t always pay their balance in full every month.

Low Fee: For consumers seeking a credit card with low ongoing fees. They may be looking to access some premium card facilities, but not necessarily. These cards are designed for consumers who don’t use their card very often and pay their balance in full, but aren’t looking to earn big rewards.

Rewards: For consumers seeking a credit or charge card that gives them the optimal return on their everyday spending. These cards are designed for consumers who pay their closing balance in full every month, and warn to earn points that can be redeemed for something other than flights.

Frequent Flyer: For consumers seeking a credit card or charge card that will allow them to redeem points for flights. These cards are designed for consumers who pay their closing balance in full every month, are members of a frequent flyer program, and want to boost their points balance.

Premium: For consumers seeking a credit card or charge card that comes with extensive benefits beyond the standard offerings. These cards are designed for consumers who pay their closing balance in full every month and want all of the extra perks – and can afford to pay the hefty annual fee that comes with those perks.

When you next apply for a credit card, check that all of your details have been entered into the application form correctly, with no typos.

If you’re in financial trouble and are having difficulty paying your debts, consider seeking help from a qualified financial counsellor (not a debt solution or consolidation business).

Of course, there’s always the possibility of applying again later – but this time, choosing a card with lower fees and a lower interest rate. To compare credit cards and see which ones offer outstanding value, check out Canstar’s star ratings: